Germany’s ProSiebenSat.1 Books Strong First Quarter

ProSiebenSat.1 CEO Thomas Ebeling

ProSieben’s subsidiary Fabrik Entertainment is producing "Bosch" for Amazon and just received a straight-to-series order for its thriller "Odyessy" from NBC.

Germany’s ProSiebenSat.1 broadcasting group continues to grow across all sectors, with revenues up 3.3 percent and consolidated recurring operating profits 9.5 percent stronger in the first quarter of 2014.

First quarter sales hit $809 million (€581.1 million) with EBITDA results topping $195 million (€140.1 million). Increased investment in new business areas – particularly online operations – and write downs of financial assets hit ProSieben’s bottom line, however, and consolidated net profit attributable to ProSieben shareholders fell to $50.4 million (€36.2 million) from $74 million (€56.1 million) over the same period last year.

The company’s core television business in German-speaking Europe remains the biggest contributor to sales, with broadcasting operations in the region showing 1.8 percent growth to $625 million (€449.2 million).

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But the strongest growth at the group came from its smaller ancillary operations. Global sales and production  division Red Arrow Entertainment continued to expand in the U.S., acquiring factual entertainment group Half Yard and taking a 20 percent stake in online multi-channel network CDS. Red Arrow already has a global collection of boutique production companies, including L.A.-based Fabrik Entertainment, who just received a straight-to-series order from NBC for their thriller Odyssey and are producing the crime drama Bosch for Amazon Studios. Overall revenue at the group’s production and global sales segment was up 3.6 percent to $36 million (€26 million) in the first quarter. Higher costs, including ones associated with the acquisitions and investment in productions such as Bosch (which Red Arrow will distribute outside North America and Germany), meant the division booked a $3.5 million (€2.5 million) operating loss for the quarter. 

ProSieben’s digital and adjacent business, which includes online gaming, grew by 9.6 percent to $147 million (€105.9 million). Earlier this year the company acquired games publisher Aeria Games Europe in a move that made ProSieben one of the top 3 players in the European online gaming market. Following the deal, ProSiebenSat.1’s gaming community grew from 27 million to 77 million players, according to the company’s own figures.

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"We had a good start to the year: All segments continued to grow in Q1 2014. In our core TV business, we not only further increased advertising revenues, but were also able to significantly improve distribution income,“ said ProSiebenSat.1 CEO Thomas Ebeling. " In the digital business, our core areas continued to develop dynamically. In total, we are benefiting across all business segments from the continuing positive macro-economic climate. That makes us optimistic for full year."

In mid-April, ProSiebenSat.1 secured a new seven-year financing structure amounting to $835 million (€600 million), entered into two new five-year facilities comprising an unsecured term loan of $1.95 billion (€1.4 billion) and an unsecured revolving credit facility of  $835 million (€600 million). Net financial debt was up 10.1 percent to $2.2 billion (€1.59 billion) in the first quarter compared to December 31, 2013.

For the full year, ProSieben expects its growth momentum to actually increase and is forecasting strong revenue growth of mid to high single-digit percentage as well as an increase in net profits. Eberling confirmed the company’s long-term target of increasing revenues by $1.4 billion (€1 billion) by 2018 compared to 2012.